Category: Banking

While setting up another new venture during November 2012, a touch decision for the India office was to choose the right banking partner to handle the most important thing for an IT business. Yes you guessed it, I am referring to foreign inward remittance transaction. i had shortlisted few banks

1. State Bank of India

2. ING Vyasya Bank

3. ICICI Bank

3. Kotak Mahindra Bank

4. HDFC Bank

5. Axis Bank

Out of the list, I already had test of State Bank of India and ING Vyasya Bank. SBI provided wonderful exchange rate in foreign inward remittance while ING was almost close and surprisingly higher at times but I had to strike these two off for two different reasons. SBI was taking too long to credit funds and ING Vyasya had too little facilities.

Striking off ICICI was easy as they were offering pathetic exchange rate and I did not want to loose money in Forex conversion.

Before I could put my hands on HDFC and Axis Bank, I was approached by a very friendly officer from Kotak Mahindra Bank, Bhubaneswar. He was nice and, explained me the benefits of dealing with Kotak. I was also surprised to know that Kotak Bank offered interest in a current account (business checking account as called in USA). They also promised that I would get higher exchange rate per USD.

This much was enough to convince me and I went with Kotak by opening an account with Kotak Mahindra Bank.

The first surprise I received when I received the first inward remittance from USA. Yes the conversion rate was lower than SBI. But wait, it was not too low either and the transfer was really quick. About 24 hours to have funds in my account. I also get the FIRC automatically in my inbox. Wonderful! I am very happy now.

Bank staff had been friendly as well until recently I faced a weird problem.

December 2013 and January 2014, I had received 2 different inward remittance and to my surprise both were credited right in the morning of the night when it was sent from USA. WOW that is reallyfast. But wait! Here is a double surprise for me. The transaction has hit my account not as a Foreign Inward Remittance but as a local NEFT transaction. I also see a PATHETICALLY LOW conversion rate. No fee charged for inward remittance though but I can’t find FIRC in my inbox.

I thought may be a one time mistake and thought I can manage as its a single NEFT. I must mention here that we software exporters want foreign inward remittance only along with FIRC (Foreign Inward Remittance Certificate) to stay eligible for service tax exemption.

We received another transfer from USA in January and the same story is repeated. NEFT and not FIRC. What’s happening? Called them up to check this and I was told that, they received the funds in INR which is why its showing as NEFT. WHAT? Bank of America did like this?

Called up Bank of America to find out the reason and they, after checking the record, confirmed that it was sending USD only via wire in the method which they have been following since November 2012 without any change in the remittance system.

Now this makes it clear that something is wrong at Kotak’s end. I don’t want the same story to be repeated in February as well. Kept the transfer on hold and followed up Kotak customer service to find a solution. Here all the frustration starts.

Now here is something I am doing everyday

1. Call Kotak and explain the situation all from the scratch as he/she will have no clue about the complaint lodged the previous day.

2. They try to explain that I dont need to worry as the funds are credited. I then need to explain them that its NEFT and not Inward Remittance and that I don’t get any FIRC and that I have lost a lot on Forex as well.

3. They would then escalate to a senior and I need to explain everything all over again with patience and the senior would promise that by end of the day, I would receive a call bank.

4. I explain them the importance of the situation and inform them that I have put the next remittance on hold for this reason and would wan to continue once this is solved.

The same story is being repeated every day since last 3 days but with same repeat answer from them but no call back from any senior fellow from Kotak.

I am now suspecting that they are playing some game to steal the Forex money by showing it as NEFT. I am still in dark and have no clue about WHY two foreign inward transactions were shown as NEFT and what is going to happen with future transactions.

I have also started talking to Axis Bank which was recommended by a friend claiming that they provide higher exchange rate and they they credit inward remittance in few hours only which is amazing.

I am still waiting for Kotak to revert bank with a solution. But if I still don’t get a solution then the only option I would be left with is to change my bank and wind up all relationship with Kotak.